Question

Explain the logic behind the "race to the bottom" argument and the likely reason it has not occurred.

a. The race to the bottom suggests competition for higher environmental standards.
b. The race to the bottom reflects a pursuit of lower labor standards.
c. The argument is based on the equalization of global standards.
d. The race to the bottom hasn't occurred due to a lack of global cooperation.

Answer 1

The 'race to the bottom' refers to countries competitively lowering environmental standards to attract business, but it hasn't happened as predicted because firms value other factors more highly than lax regulations.

Step-by-step explanation:

The "race to the bottom" argument refers to a situation where countries lower their environmental standards in order to attract multinational firms looking to reduce costs by relocating production to countries with weaker regulations. This can lead to a downward spiral in global environmental protection as nations compete to offer the most lax standards to gain economic advantage.

Although this scenario sounds plausible, it is not fully supported by evidence. Firms often consider other factors such as infrastructure, stability, and workforce skills when deciding where to locate their operations. Hence, the race to the bottom has not occurred to the extent some had feared, because the lure of weak environmental regulations is not as strong as assumed.